Abstract During the last decade, it was shown that key signaling pathways (Wnt, Hedgehog, Notch, TGF[unreadable]/BMP, etc.) that regulate skin development also play important roles in the development of skin cancers. Bone morphogenetic protein (BMP) signaling is a powerful regulator of skin development and tumor suppressor, and our long-term objectives are to pursue a deeper understanding of its role in the control of normal versus neoplastic cell fate decision in the keratinocytes with goals to develop new therapies for skin regeneration and neoplasias. During previous five years of funding, our studies were focused on delineating the roles for BMP antagonist Noggin and BMP-Smad signaling pathway in the control of normal skin development and hair growth. Our research program for next funding period will integrate these findings with major advantages achieved during last few years that revealed remarkable similarities in the mechanisms controlling skin development and tumorigenesis, as well as with the emerging role for BMP signaling in regulating the maintenance and activity of cutaneous stem cells. Specifically, we will further pursue the mechanisms underlying tumor suppressor function of the BMP signaling in the skin and will test the hypothesis that BMP signaling regulates the activity of epithelial stem cells and/or their progenies in the skin and prevents their neoplastic transformation by antagonizing key pro-oncogenic signaling pathways (Wnt and Shh). This hypothesis will be addressed via three specific aims: 1. Define the role of the BMP-Smad signaling in the reprogramming of normal hair follicle stem cells and/or their progenies towards the tumor progenitor cell phenotype. 2. Define the mechanisms underlying involvement of the BMP-Smad pathway in modulating the Wnt signaling in normal hair follicle stem cells/their progenies and in neoplastic progenitor cells. 3. To define the role and targets for BMP-Smad signaling in regulating the activity of Hedgehog pathway in hair follicle stem cells/their progenies and skin tumorigenesis. Successful realization of this proposal will provide new important insights into our knowledge on the mechanisms regulating the activity of normal and neoplastic stem cells in the skin and may provide a novel strategy for therapeutic management of tissue regeneration and neoplastic processes via modulation of stem cell activity.